This competing renewal seeks to continue our development of novel, gene-based methods for improving the healing of large segmental defects in bone. For reasons discussed in the body of the grant, a recombinant adenovirus vector carrying the cDNA for human bone morphogenetic protein-2 (Ad.BMP-2) is used for this project. During the first funding cycle of this grant, using a rat femoral defect model, we noted a remarkable improvement in defect healing when skeletal muscle from syngeneic rats was transduced with Ad.BMP-2 and then inserted into the defect. Under these conditions, healing of the defect was rapid, reliable and uniform. In the next cycle of this grant we propose two Specific Aims that will: i) establish the biology that underlies this phenomenon and ii) evaluate the efficacy of the technology in a large animal model, the sheep. The latter Aim will be completed in collaboration with AO Research Institute in Davos, Switzerland. Specific Aim 1 will test the hypothesis that the high effectiveness of Ad.BMP-2 modified muscle grafts in promoting bone healing reflects the ability of the graft to supply not only endogenously synthesized BMP-2, but also progenitor cells that form cartilage and then bone. Because immune responses to adenovirus is a recognized problem for certain applications of adenovirus-based gene therapy, Fischer rats will be used to determine the duration of transgene expression in the rat and the role of the immune system in curtailing expression. Based upon our preliminary data, the abbreviated ex vivo method we have developed eliminates the humoral response to the virus. To enable us to take advantage of genetically modified mice to address the other questions raised in Specific Aim 1, we have developed a new model in which muscle from genetically modified mice are inserted into femoral defects in athymic rats. Using this model we will insert Ad.BMP-2 transduced muscle grafts from the following genetically modified mice: mice containing the luciferase gene under the control of the human osteocalcin promoter; Rosa mice, all of whose cells are LacZ+; and mice derived from crosses between Tie2- Cre mice and R26R mice to enable lineage analysis of tie2+ cells derived from endothelial cells of blood vessels. The sheep studies will utilize a standard 3cm, critical size tibial defect to evaluate the reparative ability of Ad.BMP-2 transduced autologous muscle grafts. Healing will be assessed by serial radiology. After 6 months, sheep will be euthanized and healing assessed by micro-computed tomography, histology, mechanical testing and intravital fluoroscopy. The immune response of the sheep to the vector will also be assessed, and various organs will be recovered at necropsy for evaluation of histopathology and the distribution of viral genomes.